Driving customer retention through your Service Department
In an increasingly competitive new vehicle market, the Service Department presents unique opportunities for growth
A recent study by Cox Automotive into the performance of dealerships' workshops in the US has uncovered several opportunities for increased profitability and growth. At a time when the battle for customer retention is at an all-time high, dealerships who avail of relevant technology to allow for a seamless service experience will win out.
While this data is US-based, these findings and recommendations are very relevant to the Irish Motor Industry.
While this data is US-based, these findings and recommendations are very relevant to the Irish Motor Industry.
The service customer's journey begins at the new car purchase stage
85%
Said their experience with the Service Department has influenced their likelihood of purchasing another vehicle
93%
Believe that the service experience is more important than the actual repair
Why introduce your customer to the Service Department during the sales process?
Personally introducing a consumer to the Service Department increases that customer's likelihood of returning to the dealership for maintenance and repair services. While only 41% of car buyers were introduced to the Service Department at the time of their vehicle purchase, over half of those customers said it came into play when deciding where to get their vehicle repaired.
41%
Were introduced to Service Department at the time of purchase
53%
Said it played a part in deciding where to get their vehicle repaired
2.3x
Increase in customer return rate when introduced to Service Department at time of purchase
What do customers want?
Top 5 reasons why service customers go to the dealer
1. They know my vehicle
2. Certified/highly qualified technicians
3. Knowledgeable staff
4. Use genuine parts, tools, and diagnostic equipment
5. Explain services rendered/comfortable waiting room
2. Certified/highly qualified technicians
3. Knowledgeable staff
4. Use genuine parts, tools, and diagnostic equipment
5. Explain services rendered/comfortable waiting room
Top 5 reasons why service customers don't go to the dealer
1. Total cost is NOT reasonable
2. They will over charge me
3. Unreasonable labor charges
4. Unreasonable parts charges
5. Distance/Location
2. They will over charge me
3. Unreasonable labor charges
4. Unreasonable parts charges
5. Distance/Location
Actual spend for services such as an oil change suggest that dealership pricing is competitive with third-party providers. As a result, dealers have an opportunity to compete with independent service providers by offering and promoting competitive pricing and price match guarantees while focusing on advertising messages about high-quality service (e.g. parts and certified technicians).
CUSTOMER EXPERIENCE
The Importance of Convenience
When do your customers want to schedule their service?
This study showed that while 6-11am are still the peak hours for service appointments with 56% of the total, 44% of appointments came between 11am-4pm.
Only 28% of customers want to come in before 9am.
Only 28% of customers want to come in before 9am.
Appointments are more valuable than walk-ins
When are your customers scheduling their service?
Notably, 32% of customers booked their service online out-of-hours
Are your customers aware of your online scheduling?
45%
Didn't know if their dealer offered online scheduling
CUSTOMER EXPERIENCE
The Role of Technology
How technology can support the service customer experience
The interactive nature of the Service Department using iPads/tablets during the service process can positively impact customer retention, resulting in higher CSI scores
Automation can ensure that the customer receives an efficient and personalised service at every touchpoint.
Improvements in Service Department technology can greatly improve the entire service experience. This technology should seamlessly integrate with your DMS.
Only 3% of dealers surveyed used text messaging to update service customers. However, when updated by text, customer's likelihood of returning improved.
Scheduling a service visit
While the majority of service appointments are pre-scheduled, that process can often be unnecessarily cumbersome. Today's customer expects a seamless experience when shopping online; this includes booking their car service.
59%
Of service visits are scheduled
45%
Of consumers who did not schedule online do not know that the option exists
76%
Of consumers who scheduled service online would be willing to do so again
Immediate access to messaging, email, media and other online functionality through smartphones has generated a sense of entitlement to fast, simple and efficient experiences.
Time-starved consumers are increasingly driven by the ultimate convenience of real-time, on-demand choices and the majority of car owners schedule an appointment rather than walking in.
Dealerships need to align their service models to consumers' growing appetite for greater convenience, speed and simplicity by implementing online scheduling and making customers aware that you offer this convenience.
Time-starved consumers are increasingly driven by the ultimate convenience of real-time, on-demand choices and the majority of car owners schedule an appointment rather than walking in.
Dealerships need to align their service models to consumers' growing appetite for greater convenience, speed and simplicity by implementing online scheduling and making customers aware that you offer this convenience.
Service Experience Multiplies Customer Retention
In summary, there are huge opportunities for dealers to provide their customers with a seamless, user-friendly service experience and in doing so, significantly grow aftersales customer retention.
Share this article
Sign up to blog alerts
Previous posts
© All Rights Reserved. Start Monday Ltd.
CONTACT US